Tanker freight up sharply on crude oil demand

Image via Shutterstock
A notable exception to the sliding Baltic Dry Index has been the tanker segment for transport of crude oil. The fall in crude oil prices has led to importing countries rushing to fill their reserves, keeping the trade route concerned busy.

The index here, the Baltic Dirty Tanker Index, has been rising since September, from 598 points to 957 —up 60 per cent. During the period, Brent crude fell from $48 a barrel to below $30, down 40 per cent. A further rise in tanker freight rates isn’t expected. But stability is.

India hasn’t actually raised its oil import by much, despite the fall in crude, due to a relatively limited refining capacity. Imports have happened for storage to the extent of available capacities.  “India does not have much storage facilities to build reserves like China in times of commodity price fall; wek continue to import at the same pace,” said Anoop Sharma, managing director of Essar Shipping.

As for the tanker segment, Abhishek Deshpande, lead oil analyst at Natixis, the global investor, says he expects term charter rates to go up.

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel